Offsets in Decision Point

A smorgasbord of offset treats

The Environmental Decision Group contains some of the world’s leading thinkers and researchers on the subject of biodiversity offsets. That expertise is on display in this issue of Decision Point but it’s also been highly visible in issues gone by. Here is a selection of stories that have appeared in Decision Point on biodiversity offsets over the years. They cover a range of topics explored by a diverse group of researchers.

There are at least 45 ‘biodiversity offset’ programs and policies currently in place around the world. Since the basic goal of all of these methodologies is the same – that is, no net loss – one might hope that they would give similar answers if they were applied to a common case study. Joe Bull and colleagues tested this approach and it turns out they don’t. Their analysis highlights how different the philosophy behind biodiversity offsetting in different countries can be.

When Megan Saunders and colleagues examined the Australian Government’s environmental legislation underpinning the offsets policy under a legal lens they found that it may not adequately protect vulnerable marine ecosystems. Without amendments to the offsets policy, iconic habitats such as coral reefs, seagrass and mangroves, could all pay a heavy toll.

The EPBC Act policy permits up to 10% of the impact to be compensated for with a cash contribution to research or education – termed ‘other compensatory measures’. The amount of this payment is scaled to the cost of the direct offset component, but in a non-linear way, so the last 10% of the offset costs much more than 10% of the direct offset. This reflects that the cost of delivering conservation outcomes increases nonlinearly as the cheaper options are taken up. If it all sounds like a lot of work, that’s because genuine offsetting is a challenging process. However, when done with rigor, offsetting can reduce the chance that declines will become steeper. It can also reveals the replacement cost of biodiversity. In most cases, that cost is more than we might think.

Australia is among the most advanced countries in terms of its biodiversity offset policy regime with most states and territories, and the Australian Government, having some form of offset policy. However, although this approach is being increasingly applied, when Martine Maron and colleagues reviewed the literature on the effectiveness of restoration for biodiversity offsets they found there is little evidence that it can work.

There are serious flaws in schemes that allow habitat losses today being offset by biodiversity gains achieved at sometime in the future. In effect, this type of biobanking is operating like a lending bank, but it’s a loan in which the general public is carrying the risk, and the return on the investment will inevitably be a loss. If an offset is supposed to result in no net loss of biodiversity then these schemes are simply unacceptable. Sarah Bekessy explains that if you’re going to use biobanking for offsets then the approach needs to based on a savings bank model in which biodiversity assets are first built up before a withdrawal is made from the biodiversity balance.

This Decision Point editorial looked at the impacts of one of the earlier offset schemes introduced in NSW. The assessment methodology introduced with the NSW Native Vegetation Act in 2005—which included offsets—resulted in an 80% reduction in the area approved for clearing in rural NSW relative to the area approved for clearing under the previous policy, which did not include offsets. Phil Gibbons explains that there were four reasons why the introduction of biodiversity offsets in NSW resulted in considerable avoided loss in biodiversity.